Correlation Between Automatic Data and Randstad Holdings
Can any of the company-specific risk be diversified away by investing in both Automatic Data and Randstad Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Automatic Data and Randstad Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Randstad Holdings NV, you can compare the effects of market volatilities on Automatic Data and Randstad Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Automatic Data with a short position of Randstad Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Randstad Holdings.
Diversification Opportunities for Automatic Data and Randstad Holdings
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automatic and Randstad is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Randstad Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Randstad Holdings and Automatic Data is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Automatic Data Processing are associated (or correlated) with Randstad Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Randstad Holdings has no effect on the direction of Automatic Data i.e., Automatic Data and Randstad Holdings go up and down completely randomly.
Pair Corralation between Automatic Data and Randstad Holdings
Considering the 90-day investment horizon Automatic Data Processing is expected to generate 0.81 times more return on investment than Randstad Holdings. However, Automatic Data Processing is 1.24 times less risky than Randstad Holdings. It trades about 0.25 of its potential returns per unit of risk. Randstad Holdings NV is currently generating about -0.27 per unit of risk. If you would invest 28,644 in Automatic Data Processing on August 29, 2024 and sell it today you would earn a total of 2,153 from holding Automatic Data Processing or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. Randstad Holdings NV
Performance |
| Timeline |
| Automatic Data Processing |
| Randstad Holdings |
Automatic Data and Randstad Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Randstad Holdings
The main advantage of trading using opposite Automatic Data and Randstad Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, Randstad Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Randstad Holdings will offset losses from the drop in Randstad Holdings' long position.| Automatic Data vs. ExlService Holdings | Automatic Data vs. WNS Holdings | Automatic Data vs. Gartner | Automatic Data vs. The Hackett Group |
| Randstad Holdings vs. The Caldwell Partners | Randstad Holdings vs. Kelly Services A | Randstad Holdings vs. TrueBlue |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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